Deed of variation: changing a section 106 agreement

A deed of variation is the normal way to change a section 106 agreement, and it works by consent: the local planning authority and everyone bound by the obligation sign a new deed that amends the old one. Nothing in the Town and Country Planning Act 1990 stops that happening the week after completion. The statutory route under section 106A, with its five year wait and its narrow test, only matters when the authority will not agree. Most variations never get near it.

That distinction is the thing developers get wrong. A deed of variation section 106 negotiation is a commercial conversation with a planning officer and a solicitor. The section 106A application is a formal determination with an appeal attached. Knowing which one you are in changes your programme by months.

Varying by agreement, and why it is almost always the route

Section 106A(1)(a) allows a planning obligation to be modified or discharged at any time by agreement between the authority and the person or persons against whom it is enforceable. The agreement has to be by deed, and it has to be executed by everyone who is bound.

There is no statutory test at this stage. The authority is exercising its ordinary planning judgement, so it can agree to anything it could lawfully have agreed to in the first place. In practice that means the officer will ask whether the varied obligation still meets the three tests in regulation 122 of the Community Infrastructure Levy Regulations 2010: necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. A variation that leaves an obligation failing those tests is not a variation the authority should sign.

Timing is the reason people misread this. A payment trigger that made sense at outline stage often makes no sense once the scheme is phased differently, and shifting a payment trigger from the start of works on site to first occupation of plot 25 is the sort of change officers deal with routinely. Expect a fee for the council's legal costs, and expect the legal team rather than the planning team to set the pace.

The statutory application after five years

Section 106A(3) gives a different right. Once five years have passed from the date the obligation was entered into, any person against whom it is enforceable may apply to the authority to have it modified or discharged, whether or not the authority wants to.

The authority then has three possible outcomes under section 106A(6). It may determine that the obligation no longer serves a useful purpose, in which case it must discharge it. It may determine that the obligation continues to serve a useful purpose, but would serve that purpose equally well if modified as the applicant proposes, in which case it must modify it accordingly. Or it may determine that the obligation shall continue to have effect without modification.

Read the second limb carefully. The authority is not asked whether your proposed modification is reasonable, or viable, or fairer. It is asked whether the purpose of the obligation would be served equally well. An applicant who wants to cut an affordable housing obligation from 35 per cent to 20 per cent is asking the authority to accept that a smaller quantum serves the affordable housing purpose equally well, which is a hard argument to win on its own terms.

The procedural detail, including the period for determination and the form of the application, sits in the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992. Check the current version before you diarise anything.

Affordable housing and viability variations

Affordable housing is where most variation requests start, and it is where the five year rule bites hardest. A scheme consented in a strong market and built in a weak one may be undeliverable in practice at the consented tenure mix.

Between 2013 and 2016 there was a bespoke route for exactly this. Sections 106BA to 106BC, inserted by the Growth and Infrastructure Act 2013, let applicants apply to modify an affordable housing requirement on viability grounds with an appeal to the Secretary of State. That route expired and is no longer available. What remains is the ordinary section 106A power, plus the willingness of the authority to agree a deed.

So a viability-led variation is a negotiation, not an entitlement. Bring an open book appraisal, prepare for the authority to instruct its own reviewer at your cost, and expect a review mechanism to be the price of agreement: a late stage review clause that claws back value if the scheme outperforms the appraisal. If the argument turns on the evidence base, a viability assessment prepared to the RICS professional statement on financial viability in planning is the document the authority's consultant will mark against.

Note: a variation that changes what is built, rather than what is paid or provided under the agreement, is not a section 106 question at all. That is a section 73 application, or occasionally a non-material amendment. The two often run together, and our note on section 96A non-material amendments and their limits sets out where that boundary falls.

Who has to sign

Everyone bound by the obligation needs to be a party, and on an older agreement that list is rarely obvious. Start with the title. A planning obligation is registered as a local land charge, and the entry on the register and on title will tell you which agreement bites and against which parcels.

Then work through the interests. The original landowner may have sold. A housing association may have taken a transfer of the affordable units subject to a mortgagee exclusion clause. A lender will usually want to be a party, or at least to consent, because a variation that increases the burden on the land affects its security. Registered providers and their funders often have their own approval timetable, which is the single most common cause of a deed sitting unsigned for two months.

Where part of the land has been sold off, the obligation may still bind that parcel even though the new owner has no interest in the variation. Getting them to execute can be slow. Plan for it.

Appealing a refusal

Section 106B gives a right of appeal to the Secretary of State where the authority refuses a section 106A application or fails to determine it in time. The appeal is handled by the Planning Inspectorate and decided on the same statutory test.

Appeals of this kind are uncommon, partly because the "equally well" test is unforgiving and partly because the five year wait means the commercial moment has usually passed. Where they succeed, it is normally because the obligation has been overtaken by events: a highway works contribution for a junction the highway authority has since built differently, or a travel plan monitoring payment for a monitoring regime the authority abandoned. Those are obligations that no longer serve any useful purpose.

The appeal period is set by the regulations rather than by the Act, so check it at the point you receive the decision notice.

Drafting points that save you a second deed

Name the original agreement precisely, by date and parties, and recite every prior variation. Agreements that have been varied twice already are common, and a deed that amends the wrong version is worthless.

Amend by clause number and set out the replacement wording in full rather than describing the change. Deal expressly with whether the variation takes effect from the date of the deed or retrospectively, because triggers that have already passed need saying something about. Confirm that the rest of the agreement continues in full force. And state whether the varied obligation is a local land charge in its own right, so the registration is clean.

One practical habit: ask the authority at the outset whether it wants the variation to go to committee. Some schemes of delegation allow officers to agree variations, others reserve anything touching affordable housing. That single question sets your programme more than anything in the drafting.

If you are rebuilding the supporting case for a varied scheme, PlanScope can draft the planning statement, viability and transport documents that sit around it. Start by entering the postcode on PlanScope to see which reports the site is likely to need.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.